Non-GAAP Reporting
Techwell reports both GAAP and non-GAAP measures to evaluate our financial results. The non-GAAP measures used are: net income, excluding stock-based compensation expense and related tax effect and tax effect on the release of a valuation allowance on deferred tax assets, and net income per diluted share, excluding stock-based compensation expense and related tax effect and tax effect on the release of the valuation allowance on deferred tax assets. Techwell believes that the non-GAAP measures, when viewed in addition to and not in lieu of our reported GAAP results, assist investors in understanding its results of operations. The Company also believes non-GAAP measures provide useful supplemental information for investors to evaluate the operating results in the same manner as the research analysts that follow Techwell, all of whom present non-GAAP projections in their published reports. As such, non-GAAP measures provided by Techwell facilitate a more direct comparison of its performance with the financial projections published by the analysts. However, non-GAAP measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
Techwell, Inc. and the Techwell, Inc. logo are trademarks of Techwell, Inc. All other trademarks are the property of their respective owners.
TECHWELL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Twelve Months
Ended Ended
December 31, December 31,
2007 2006 2007 2006
------- --------- ------- --------
Revenues $16,505 $ 16,010 $59,887 $53,712
Cost of revenues 6,381 6,865 24,209 22,977
------- --------- ------- --------
Gross profit 10,124 9,145 35,678 30,735
------- --------- ------- --------
Operating expenses
Research and development 3,717 2,199 12,298 9,183
Selling, general and
administrative 3,436 2,638 12,204 8,702
------- --------- ------- --------
Total operating expenses 7,153 4,837 24,502 17,885
------- --------- ------- --------
Income from operations 2,971 4,308 11,176 12,850
Interest income 854 646 3,089 1,670
------- --------- ------- --------
Income before income taxes 3,825 4,954 14,265 14,520
Benefit (provision) for income
taxes 438 (104) 518 (1,298)
------- --------- ------- --------
Net income $ 4,263 $ 4,850 $14,783 $13,222
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Net income per share
Basic $ 0.20 $ 0.24 $ 0.71 $ 1.04
======= ========= ======= ========
Diluted $ 0.20 $ 0.22 $ 0.68 $ 0.64
======= ========= ======= ========
Shares used in computing net
income per share
Basic 20,864 20,187 20,772 12,772
Diluted 21,834 22,206 21,818 20,538
TECHWELL, INC.
RECONCILIATION OF GAAP NET INCOME
TO NON-GAAP NET INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Twelve Months
Ended Ended
December 31, December 31,
2007 2006 2007 2006
-------- -------- -------- --------
GAAP net income $ 4,263 $ 4,850 $14,783 $13,222
Stock-based compensation
expenses:
Cost of Revenues 103 45 297 117
Research and development 416 191 1,830 1,100
Selling, general and
administrative 785 243 2,423 1,050
-------- -------- -------- --------
Total stock-based
compensation expenses 1,304 479 4,550 2,267
-------- -------- -------- --------
Tax effect on stock-based
compensation expenses (810) (8) (1,391) (68)
Tax effect from the release of
valuation allowance and other - - (1,201) -
Non-GAAP net income $ 4,757 $ 5,321 $16,741 $15,421
-------- -------- -------- --------
Non-GAAP net income per share
Basic $ 0.23 $ 0.26 $ 0.81 $ 1.21
======== ======== ======== ========
Diluted $ 0.22 $ 0.24 $ 0.77 $ 0.75
======== ======== ======== ========
Shares used in computing net
income per share
Basic 20,864 20,187 20,772 12,772
Diluted 21,834 22,206 21,818 20,538
